Many people are starting to get their stimulus checks, but we’re starting to hear about some who have gotten money for family members who have passed away.
The question is, What do you do with that money and why was it given out in the first place?
Everyone’s situation is going to be different for getting these checks.
When it comes to getting money for someone who has passed away, David Echelbarger, CPA and President of EHTC Business consultants tells FOX 17, it’s because the IRS is working with old information from 2018 tax returns since many people haven’t filed for 20-19 yet.
Echelbarger said, “Someone may have filed a tax return in 2018 and today, they didn’t file a 2019 tax return because they were deceased, or they filed a deceased tax return late or they haven’t filed that yet, so the IRS does not know that that individual is not with us anymore."
Echelbarger said in the IRS’s attempt to get people money as soon as possible, there may be some unintended consequences, including people getting money they shouldn’t have.
He said , “For example, a situation where your grandparents, your grandmother passed away and she was on your 2018 tax return and then not on the 2020 tax return. We do the calculation and there only should have been one check that was received for $1,200, so there will be tax due or payment due to the government at that time, is how I believe this is all going to come together."
With that in mind, Echelbarger said families who get a check or direct deposit like this need to be cautious.
“What I fear is people get all excited and they get a check for $2,400 for the two people and then they go spend that money and then they get the big surprise that in April, 2021 that they owe $1,200 dollars and I think that's going to happen to some people," he said.
If you haven’t gotten any money yet, there could be a few reasons why.
“Everybody's going to have a different situation. Did they file their 2018 tax return> Did they file their 2019 tax return? Does their income qualify,” said Echelbarger.
He added, your payment may also be delayed or withheld if you owe child support or are under debt collection.
“There are certain agencies that have agreements with the treasury and child support is one of those. So if there is some back child support and there is a stimulus check that is going to be received, the treasury can redirect that, and I think they have the right to, " he said, “If you do have a direct deposit to your bank account and there is some type of levy against that bank account, that could come out of your bank account as well."
If you’re unsure about where your money stands, Echelbarger notes that the IRS website is updating their FAQ section every day, just keep in mind, it’s running much slower these days with everyone logging on.
“At the end of the day, the only way to send that back is, I believe is on your 2020 tax return in April 2021, so it's essentially going to be a loan."